U.S. Energy Panel Plans More Oversight Of Gasoline Reserve

Posted by Joseph R. Fonseca

Wednesday, May 28, 2014

U.S. House Republicans will continue delving into the Obama administration's creation of an emergency gasoline reserve in the Northeast, after a briefing by the Department of Energy failed to quell concerns about the stockpile, a committee aide said on Tuesday.

Senior members of the House Energy Committee asked for the briefing after the DOE earlier this year held the first test sale of crude from the Strategic Petroleum Reserve (SPR) since 1990, and later announced plans to create a million-barrel gasoline reserve in the Northeast.

The briefing was held on Friday, but the energy panel "continues to have questions about the current and future status of the SPR," a committee aide said.

The aide requested anonymity in discussing a briefing that was not open to the public.

The committee plans to continue oversight of the new gasoline reserve, but no hearings have been scheduled.

Republicans generally oppose use of the petroleum stockpile except in cases of severe supply disruption, because of its potential to distort prices.

In a letter to the Energy Department, the lawmakers questioned the agency's authority to create the gasoline reserve and noted that it was not included in the department's 2014 and 2015 budget requests.

The $200 million gasoline reserve would be supported with funds from the SPR.

The administration, in turn, has said the test sale was needed to assess the petroleum reserve's capabilities in light of changing energy market dynamics. Since the SPR was created the United States has become a major producer of crude oil.

The gasoline reserve, which the administration hopes will be operational by late summer, was proposed earlier this month. The idea for a regional stockpile gained traction after disruptions to supplies caused by Superstorm Sandy in 2012 left some Northeast motorists without fuel for weeks.

Established in the 1970s after the Arab oil embargo, the SPR currently holds about 691 million barrels of crude oil in underground salt caverns along the U.S. Gulf Coast.